Use them or lose them, Virgin Australia tells Velocity members

The airline, which is looking to return to the ASX, has given inactive Velocity users just a few weeks to use their points as it starts a ‘clean up’.

Virgin Australia has embarked on a clean up of inactive Velocity frequent flyer accounts, warning members their points will expire on June 30 if they don’t engage in the program.

The move followed a one-year extension last July to the usual 24-month “grace” period in recognition of the limited opportunity to fly during the Covid-19 pandemic.

Emails and letters sent earlier this month warned of the impending points expiry, unless members booked a flight or undertook some other activity to earn or spend points before the end of June.

A Virgin Australia spokesman said the one-year extension to the normal 24-month period was “an acknowledgment of the difficulties many members experienced trying to earn or spend points during the pandemic”.

“Those impacted by the upcoming expiry will have had no activity on their accounts for three years,” he said.

“Members can extend the validity of their balances by earning or redeeming as little as a single point, which will automatically renew their balances for another two years.”

Virgin’s Velocity has about 11 million members.

The Jayne Hrdlicka-led Virgin denied the Velocity move was linked to its planned initial public offering, which is expected to take place in the second half of the year.

It was reported by Bloomberg on Tuesday that Virgin’s owner Bain Capital was targeting a November float for the airline.

Managing editor of Point Hacks Daniel Sciberras said given Velocity was a “frequent flyer” program, it was reasonable to expect members made an effort to earn or redeem points.

“Each program has different expiry rules. Some programs (like United Airlines) don’t have an expiry date whereas others like the Australian programs have a soft expiry, so your points expire but only if you have no activity,” he said.

“Then there’s other programs that are more hardcore, like Singapore Airlines’ KrisFlyer, where points expire after three years whether there’s activity or not.”

Mr Sciberras said it was good to see Virgin Australia giving Velocity members notice that their points were about to expire, and allowing them time to save them.

“In our view, it is a frequent flyer program and loyalty has to go both ways,” he said.

“So if you’re inactive for a three-year period or even two-years, one as to question whether you’re a frequent flyer or loyal to that particular program.”

Saving your Velocity points, could be as simple as “buying a loaf of bread from a 7-Eleven store”, he said.

“It doesn’t have to be a flight booking, it can be something small and then you’ve got your account for another two-years,” Mr Sciberras said.

In the case of Qantas frequent flyers, points expired after 18-months of inactivity, which was often a source of some frustration for members.

Mr Sciberras said he did not see the benefit in wiping out members’ points balances, but most airlines considered inactive accounts a “liability”.

Virgin Australia’s Velocity had about 11 million members, while Qantas frequent flyers was Australia’s biggest loyalty program with 14 million members.

As well as redeeming points for flights, program members were able to use points for cabin upgrades and shopping at “partner” businesses and online stores.

Both programs had multiple partners including banks and financial institutions, major retailers, supermarkets and service stations.

Originally published as Use them or lose them, Virgin Australia tells Velocity members